During the month of June, companies throughout America saw a huge increase in hiring activity. According to ADP’s National Employment Report, the private sector added almost half a million jobs last month, which is drastically higher than economists’ predictions of 230,000 added jobs for June. Furthermore, this number is also much higher when compared to the number of private sector hires in May, as the ADP report for May shows only 267,000 jobs added.
Overview
Despite record-high interest rates and extreme inflation, the U.S. Labor market has been able to stay resilient month after month and continues to exceed the expectations of economic experts. For 30 consecutive months, the U.S. Labor market has been adding jobs at a relatively steady pace.
Will the Labor Market Cool Off?
Despite seeing a net gain of Jobs this month that exceeds every number since before the pandemic, some economists are still weary of a Labor Market that could come to a halt. Sarah House is a senior economist at Wells Fargo, and she believes that the Labor Market will begin to gradually cool down. “The jobs market is not collapsing,” she said. “But as we get further away from the [pandemic] reopening, the impact of tighter monetary policy increasingly bites. We do look for the job gains to continue to ease on trend.”
A Peak in Hiring Reached
Out of the almost half a million jobs added to the private sector, leisure and hospitality businesses saw the biggest increase in employees. Despite these industries reaping the benefits of employee growth, ADP’s chief economist Nola Richardson stated there are indications that hiring activity may have hit its peak in the month of June. “Wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge,” she said in a statement.
Wrap Up
Many companies in the United States currently find themselves in a delicate situation, where they are maintaining their employees despite demand softening in most industries. As the economy continues to recover from the pandemic, it is a relief to see inflation slowing down and people getting hired and maintaining their jobs.